UBS analyst Simon Payne wrote in a report on Monday that traders think the probability of another rate hike next month is 68%. However, he pointed out that the market underestimated the possibility that the Federal Reserve would exercise restraint before the midterm elections. Penn pointed out that this pricing ignores Washington's most important rule of political operation — the Federal Reserve has never raised interest rates at a policy meeting held a month before the midterm elections in the past 35 years. Current market pricing shows that the Federal Reserve will raise interest rates by 17.4 basis points at the October 28 meeting. But this is extremely unlikely to happen. Since 1990, every time the Federal Reserve meets in October before an election, it has never raised interest rates. In the past 35 years, the Federal Reserve raised interest rates only three times at the September meeting closest to the election.

UBS analyst Simon Payne wrote in a report on Monday that traders think the probability of another rate hike next month is 68%. However, he pointed out that the market underestimated the possibility that the Federal Reserve would exercise restraint before the midterm elections. Penn pointed out that this pricing ignores Washington's most important rule of political operation — the Federal Reserve has never raised interest rates at a policy meeting held a month before the midterm elections in the past 35 years. Current market pricing shows that the Federal Reserve will raise interest rates by 17.4 basis points at the October 28 meeting. But this is extremely unlikely to happen. Since 1990, every time the Federal Reserve meets in October before an election, it has never raised interest rates. In the past 35 years, the Federal Reserve raised interest rates only three times at the September meeting closest to the election.